Skimm Money: Economic Recovery, Stimulus Updates, and Tax Tips

Published on: Feb 26, 2021fb-roundtwitter-roundemail-round
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Pop quiz: What’s everyone doing at 8pm on March 25? If you said “learning about the psychology of money,” you get an A+. This week, we officially opened registration for SkimmU: our new virtual event series and spin on higher ed. And this semester's all about money. Our other (free) courses include info and tips on budgeting, starting a side hustle, and investing. Save your seat.

Headlines, Skimm’d:

  • Economic Magic 8 Ball: recovery outlook good? On Thursday, the 10-year Treasury (a type of gov bond) yield jumped to the highest level in a year. Here's why that hints investors are optimistic about economic growth. Plus, what it means for stocks and your wallet.

  • "Wall Street Bets" is back. A month after the GameStop controversy dominated your news feed, Reddit traders coordinated to drive up the video game retailer's stock price again – over 100% on Wednesday alone. The rise reportedly cost short-sellers more than $1.85B in two days.

  • $1,400 could be coming your way. The House is expected to pass the $1.9T relief package (which includes more direct payments) as soon as today. Senate Majority Leader Chuck Schumer (D-NY) says Dems want a bill on the president's desk before March 14, when enhanced unemployment benefits expire.

  • Black women are experiencing the most financial pain. In a recent survey, 57% of Black women (vs. 29% of all respondents) said they're counting on more gov aid to get by.

  • Who's down with PPP? The Biden admin announced changes to the Paycheck Protection Program this week, aimed at ensuring aid goes to those who need it most. Until March 10, only businesses with fewer than 20 employees (which includes a lot of women- and BIPOC-led companies) can apply. It also nixed the restriction barring delinquent student loan borrowers from asking for PPP help.

Make (Good) Money Choices

If you're saving up to buy a home...

Double-check what you can afford. US home prices spiked 10.4% in December 2020 compared to December 2019. (Yes, that's a lot.) Pro tip: before you take on a new monthly expense, test-drive your budget. Try Zillow’s mortgage calculator to estimate your potential monthly mortgage payment. Then subtract what you currently pay for housing, and save the difference. If you can comfortably afford it, there's a good chance your wallet can handle the move.

If you haven’t checked your credit lately...

Add that to your to-do list. (Especially if you’re budgeting for something big – see above.) More Americans have been finding errors on their credit reports over the past year. Think: an on-time debt payment reported as missing or late. And those mistakes could lower your credit score and cost you money. If you find an error on your credit report, here’s how to fix it.

If you’re expecting a tax refund...

Adjust your tax withholding. Because getting a refund could mean you're overpaying Uncle Sam year-round. And while extra cash at tax time might be nice, making some quick changes to your W-4 could get you a little more money every payday. As for this year's refund, make a plan to spend it wisely. A few ideas: pay down high-interest debt, add to your emergency fund, invest it or save it for another big goal.

Thing to Know

Millennial wealth gap: Yes, another wealth gap. Because financial inequality (based on things like gender, race or generation) is real. This one focuses on the gap some experts have identified between the "millennial rich" and "millennial poor." (Another millennial wealth gap exists between this generation and baby boomers. But one gap at a time.) In homeownership – often considered a key driver of wealth – more millennials purchased homes than any other generation in 2020, according to one report. But more millennials also said they feel like they’ll never be homeowners. The difference between those groups? Usually race. At age 30, 51% of white millennials own homes vs. 20% of Black millennials. And with home prices on the rise, the gap is likely to widen.

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Skimm'd by: Ivana Pino, Stacy Rapacon, and Elyse Steinhaus